Newly-weds still failing to claim Marriage Tax Allowance

HM Revenue & Customs says newly-weds are still failing to claim what could be due to them, says Jonathan Moore, an Associate at Whiting & Partners.

Although the numbers of people getting married or entering civil partnerships and claiming allowances has risen quite sharply, half of those who take their vows still fail to collect when they pledge ‘I do’.

A year ago HMRC reported that only a quarter of couples eligible for marriage tax allowance were actually claiming. The figures have increased but still stand at just over a half of couples missing out on the £230-a-year they are entitled to.

The government has tried to simplify the application process since the tax allowance was introduced in 2015 but only 2.2 million couples have claimed it against the 4.4 million eligible.

HMRC has recently launched awareness campaigns through advertising and its websites to encourage couples to apply. Applications are increasing year-on-year claims but have been much lower than anticipated. Many of those eligible may not even be aware that they are entitled to the marriage tax allowance or may not understand the application process.

How does the marriage allowance work?

Here are five helpful pointers for couples who could claim the allowance –

Partners must either be married or in a civil partnership to be eligible.

One partner needs to be earning at least £11,500 a year, and paying tax at the basic rate of 20%. If he or she is earning over £45,000 they are not eligible.

The other partner must be earning less than £11,5000 in 2017-18 and therefore paying no tax.

If the above conditions are met, the partner not paying tax can transfer 10% of his or her tax allowance to a partner, so saving £230 in this tax year.

Couples can make back-claims for previous years.

These are the basic pointers and there may still be queries relating to the marriage allowance, if so speak to Whiting & Partners to explore individual circumstances.